A Step by Step Guide on a tax return filing
Filing a tax return can seem like a daunting task, but with the right guidance, it becomes manageable. If you’re wondering how to file your tax return in Kent, this step-by-step guide will take you through the entire process. Whether you’re self-employed, have additional income, or run a small business, knowing the right steps and key deadlines is essential to staying compliant with HMRC and avoiding penalties.
1. Determine If You Need to File a Tax Return
The first step is understanding if you’re required to file a tax return. In the UK, you need to file a self-assessment tax return if:
- You’re self-employed or a freelancer.
- You earned income from rental properties.
- Your total income exceeds £100,000.
- You have significant savings, investments, or dividend income.
- You need to pay the High Income Child Benefit Charge (if you or your partner earns over £50,000).
If any of these apply to you, it’s time to register for self-assessment with HMRC.
2. Register for Self-Assessment (If You Haven’t Already)
If this is your first time filing a tax return, you must register with HMRC for self-assessment. Registration can be done online, and once you’re registered, HMRC will provide you with a Unique Taxpayer Reference (UTR). This UTR is required to file your return.
Key tip: Register early to avoid delays, as receiving your UTR number can take up to 10 days.
3. Gather the Required Documents
Before filing, collect all the documents and records you’ll need. Having everything ready will make the process smoother and reduce the chance of errors. Some key documents include:
- Income records: Payslips, invoices, and rental income statements.
- Expense receipts: Records of any allowable expenses, such as travel, office supplies, and equipment.
- Bank statements: To track income and expenditure.
- Pension contributions: To claim tax relief where applicable.
- Statements of savings or investments: Showing interest or dividends earned.
Keeping organised records throughout the year makes this step much easier.
4. Understand Key Deadlines
Missing a tax return deadline can lead to fines and penalties, so it’s essential to know when your return and payment are due:
- Paper returns: Must be submitted by 31st October.
- Online returns: The deadline is 31st January following the end of the tax year.
- Tax payment: Any tax owed must also be paid by 31st January.
If your tax bill is over £1,000, HMRC may require you to make payments on account, with the second instalment due by 31st July.
5. Complete Your Tax Return Online
Filing your return online is the quickest and easiest method. HMRC’s online portal guides you through the process step by step, allowing you to enter your income, expenses, and other relevant information. Here’s how it works:
- Log into your HMRC account: Use your Government Gateway ID and password.
- Complete the sections: Input your income, expenses, and any other applicable financial details.
- Check for accuracy: Double-check all the figures to ensure they match your records.
- Submit your return: Once you’re satisfied, submit the return online. HMRC will confirm receipt immediately.
Key tip: Use HMRC’s error-checking tool to catch basic mistakes before submitting.
6. Claim Allowable Expenses and Reliefs
Claiming all eligible expenses and reliefs is an important part of filing your tax return. Some common examples include:
- For self-employed individuals: Office supplies, travel costs, and business equipment.
- For landlords: Repairs, maintenance, and letting agent fees.
- For employees: Work-related travel and uniform costs.
Additionally, you can claim tax relief on pension contributions, charitable donations, and certain investments. These deductions can significantly reduce your tax liability.
7. Pay Your Tax Bill
Once your return is submitted, HMRC will calculate your tax bill. You’ll need to pay any outstanding tax by 31st January. Payment options include:
- Online banking: Using your HMRC account reference number.
- Direct Debit: Set up through your HMRC account.
- Debit or credit card: Via HMRC’s secure payment portal.
Key tip: If you expect to owe a large sum, start setting money aside throughout the year to avoid financial strain at payment time.
8. Plan for Payments on Account (If Applicable)
If your tax bill is over £1,000, HMRC may ask you to make advance payments toward the following year’s taxes. These are known as payments on account and are split into two instalments:
- 31st January: First payment.
- 31st July: Second payment.
Planning ahead and factoring these payments into your budget can help you manage your cash flow more effectively.
9. Common Mistakes to Avoid
- Missing deadlines: Late filings result in a £100 penalty, which increases over time.
- Forgetting deductions: Keep detailed records to ensure you claim all eligible expenses.
- Incorrect figures: Double-check all numbers and ensure they match your documents.
- Rushing your return: Starting early reduces the chance of errors and missed deductions.
How TRW Accountants Can Help
At TRW Accountants, I specialise in helping individuals and businesses file their tax returns accurately and on time. From navigating allowable expenses to managing payments on account, we provide tailored support to make the process stress-free. Whether you’re filing for the first time or managing multiple income streams, we’re here to help. Contact us today to learn how we can simplify your tax return process.
Conclusion
Filing your tax return doesn’t have to be a stressful experience. By understanding the key steps—like gathering documents, claiming deductions, and meeting deadlines—you can file with confidence and avoid penalties. And if you’d rather not tackle it alone, working with a professional accountant ensures your return is accurate and optimised for savings. With proper preparation and support, you can handle tax season with ease. For more insights, explore our resources on Tax Services in Kent and Bookkeeping Services in Kent